Californians with Medicare coverage would no longer be surprised by huge medical bills stemming from “observation care” in hospitals under legislation that state lawmakers approved overwhelmingly last week and sent to Gov. Jerry Brown to sign into law.
The sticker-shock can happen when people go to the hospital but health care providers are not sure what’s wrong. If the patient is not sick enough to be formally admitted, but still not healthy enough to go home, they can stay in the hospital for “observation care,” which Medicare considers an outpatient service. That can mean higher out-of-pocket expenses for the patient.
Hospitals can bill observation patients for a larger share of the cost of any treatment and tests than admitted patients. Any routine medications they usually take at home may not be covered at all in the hospital. In some parts of the country, Medicare observation patients have been charged exorbitant prices for prescription drugs, including $18 for one baby aspirin.
And because observation patients have not spent the required minimum of three straight days as an admitted patient, Medicare will not cover their follow-up nursing home expenses after discharge. Observation care doesn’t count.
But patients may not even know they have been placed on observation care status when they’re lying in a hospital bed.